You're Right. But So What?

It's always hard to be wrong and lose.  But it's even harder to be right and lose out anyway.

A few decades ago, I was consulting in technology market assessment in Silicon Valley. I had a succession of voice processing startup clients using newly developed technologies in voice recognition, voice synthesis, and so on. They were headed by engineers determined to sell their products to manufacturers and consumers.

They had been appalled by the poor quality of the Texas Instruments Speak N' Spell, an inexpensive voice synthesis product that had sold in great numbers to consumers as educational toys. Surely their superior products would be equally or more successful, wouldn't they? Well, no.

What these entrepreneurs had failed to realize was that having a great product didn't in itself guarantee much of anything. I explained patiently, time after time, that what was needed was established distribution or seamless integration into other manufacturers' existing products. In most cases, my clients' products were indeed superior to existing products. However, they weren't breathtakingly or awesomely superior. And their existing competition, while not superior, much less breathtakingly or awesomely so, was both entrenched and good enough. And that, sad to relate, was also good enough to inevitably end the story.

Ever since, whenever I've evaluated new products and services for marketability, I've become more and more conscious of how high the bar has become for one product to replace another. Being better is assumed. But it's insufficient. Offering greater value, lasting longer, greater ROI... it's all good. But it's not good enough. Or at least it's not good enough for long enough.

My clients in such situations have always told me, "But my product is better!" Or "My way is better" or "My service is better".  Perhaps, but the difficulty is that the future value of just being better is discounted from the beginning in the valid belief that the initial premium will not persist. Even a better product or service is destined to become a future commodity because it faces price pressures from the outset. So all I could ever do was nod sadly and respond, in effect, "You're right. But so what?"

A decade after my Silicon Valley days, I was living in Portland, Oregon, and was about to buy a new car. I did my research and decided on a specific Mazda model. I arrived armed with reams of paper and true dealer costs.  The sales manager quickly told me that I doubtless knew his costs better than he did.  It didn't matter. He knew he'd sell out his limited allotment of cars before it arrived and that he would continue to do so for the foreseeable future.  He wasn't going to lower his price because he didn't have to. Yes, I was right. But so what?

The Sony version of Google TV unfortunately provided another indisputable example. It was a visually striking series of reasonably priced LED TVs running the Android operating system that successfully married TV and the Internet  in different windows on the same screen. Why was it largely unsuccessful? Because it ran at 60 Hz in a retail environment (e.g. Best Buy) that deemed 120 Hz as the minimum refresh rate necessary to play games or display fast sports or Blu-Ray DVDs.  Since the market for LED TVs unsuited for these applications was negligible, so were the sales.

Worse, one of the major selling points for Google TV was that thousands of games on Android phones would ultimately be ported over to Google TV.  The idea of buying a TV ostensibly unsuited for playing or streaming those games turned off many TV buyers, a good number of whom were game players. Sony engineers steadfastly maintained that the 60 hz rate was adequate, and they should certainly know.  Meanwhile, the public didn't care; their attitude was, unsurprisingly, "You [may be] right. But so what?"

What's the moral here? It's that the You're right. But so what? syndrome inexorably cuts both ways. It's as valid for businesses fighting technological change as it is for politicans fighting demographic change.  It's easy to see it happening to others.  It's equally or more important to recognize when it happens to you.  And when it does, all one can do is accept it, and then move on.  Think about Don Quixote: Sometimes the windmills are only in your mind and sometimes they're real.  But in either event, the best thing to do is to walk away.  You just don't win an argument with a windmill.

The real solution is to create a superior product that is not functionally or aesthetically or otherwise comparable with existing entries. Such products thus have unique stature and command their own price levels. And even when that is eroded over time, it will retain superior profitability because of its higher starting point. Think iPod or iPhone or iPad. Just being different doesn't do it. Nor does just being better. Being awesomely better helps. But being different and awesomely better goes a lot further.

So, what's the bottom line?  You may be right, but you're rarely right permanently.  Atari's Pong and Blockbuster and Border's and even Dell computers were the right answers for their day.  But times changed, and they didn't move as fast as the times. Sound familiar? No one's exempt. For example, I have a whitepaper called Predicting the Future — And Making it Work for you.  I have to update it every 6-12 months just to make sure the future doesn't catch up with me.   It's the same lesson, isn't it?

What's the business value in being able to anticipate future developments? It's the role played by Teleconvergence's Conflection Point Planning, creating differentiation through unique value propositions that drive new revenue streams and create a sustained competitive advantage.  Ask us how we may be able to help you differentiate your future.

Postscript:  This blog was first published over a year ago. This is an updated version. It was about time.